Enterprise Zone Isn't Paying Off In Local Jobs

Companies Hire More Workers Outside Jcc

July 27, 2003|By APRIL TAYLOR Daily Press

JAMES CITY — When James City County won a coveted enterprise zone designation in 1995, officials hailed it as an opportunity to dangle tax breaks in front of businesses, a way to spur commercial and industrial development in the county while bringing good paying jobs.

The businesses and buildings have come, but the jobs haven't.

The jobs have gone mostly to residents of Newport News and Hampton.

Seven years later -- more than a third of the way through the zone's 20-year designation -- none of the companies in the enterprise zone have even applied for the lucrative local tax breaks they could receive for meeting the job-creation incentives the county established.

"We were thinking when the companies were coming in, there would be more opportunities for our young adults, especially, but I don't see that," said Phyllis Cain of Grove.

James City County offers two kinds of incentives in its enterprise zone: The first is when the business makes a capital investment of $1 million or more, and the second is a job-creation incentive, in which, among other things, 50 percent of the jobs must go to residents of the county.

Since Wal-Mart's mammoth distribution center arrived in 2000, Wal-Mart has brought about 450 jobs into the enterprise zone. But even the retail giant hasn't applied for the county's local job-creation incentives.

Based on county records, of Wal-Mart's 450 positions, only 48 jobs went to workers with a Williamsburg address. Nearly 229 went to nearby Newport News residents, and about 75 to Hampton residents.

The numbers worry Cain.

"It certainly appears to me that there would be a greater concern from the county officials who must have expected more jobs to be given to the area citizens," Cain said.

But county officials contend that the enterprise zone, overall, has been successful, pointing to the number of jobs Wal-Mart has brought in.

Plus, the county expects to net at least $3.2 million in tax revenues through fiscal year 2008, said Doug Powell, assistant manager of community affairs for the county.

Residents like Jerry Scales, also president of the Grove Recreation and Civic Association, said that's not enough.

In order to receive its zone designation, the county had to meet certain criteria -- it had to have either plenty of vacant buildings available for industrial or commercial use in the area, or it had to have an area in economic distress.

The neighborhood of Grove had both. Not only was there plenty of land zoned for industrial use, but the neighborhood at the time also was suffering from a 7.2 percent unemployment rate, well above the countywide rate of 3.7 at the time. Its per capita income was $13,475, compared to $18,139 for the county.

The county's unemployment rate for May 2003 was 2.3; figures for Grove's recent unemployment rate were not available, Powell said.

County officials, Scales said, had led Grove residents to believe that residents of the enterprise zone would get preference on jobs when Wal-Mart moved in.

Scales said he applied for a $10-per-hour job as a truck driver at Wal-Mart when they opened "just to see if I would be hired."

"But they never hired me," Scales said. "So you're going to tell me there aren't qualified people in this area to work at Wal-Mart? How qualified do you have to be to unload a truck?"

Brien Craft, general manager of Wal-Mart's import distribution center, said it's not company policy to "give preference to any particular community."

"We open the doors to anyone," Craft said. "We're not trying to isolate anyone."

Bruce Goodson, who represents the community on the count Board of Supervisors, said there was "never a promise they would be given specific opportunities."

Goodson said he was disappointed that more of the enterprise zone jobs haven't gone to the residents in the area, but there's little government can do.

"It's private industry," Goodson said. "There are incentives there to hire people within the enterprise zone, but its impossible to compel folks to do that."

Four companies have taken advantage of some kind of state or local incentive offered in the enterprise zone: Wal-Mart, Service Metal Fabricators, Ball Metal Container, and the now defunct Virginia Commonwealth Textiles.

There are also two pending businesses -- Keystone Auto and Haynes Furniture Co. -- that will most likely apply for state or local incentives, Powell said.

Companies will have been given more than $1 million in tax breaks by 2008, Powell said.

Powell describes the requirements for companies to qualify for local job-creation incentives as purposely stringent, but there are no plans to change them because the county wants to keep the standards high to ensure better jobs.